FTSE 100 index (INDEXFTSE: UKX) has been in a downtrend since the start of the week. The benchmark index turned red on Tuesday once again after sliding on Monday. It is currently down 5.82% from its yearly highs after a strong surge in the first two months of 2023.
On Tuesday, the FTSE 100 index showed a minor loss as the index slid by 5 points. This follows a 28.8 points drop in its previous trading session. The benchmark of the UK equities started the week in the green as the oil prices surged. However, the sentiment reversed as the New York session started on Monday.
FTSE 100 Index Tumbles Amid Growth Concerns
This week started with the announcement of volunteer production cuts from Saudi Arabia. The major oil producer will be lowering its production form 10 million barrels per day to 9 million barrels per day. This resulted in a positive price action in the stocks of global oil companies on Monday.
However, the FTSE 100 index closed the first trading session in the red as the investors took the increase production cuts as a sign of slowing global economy. The upcoming FOMC meeting and the May 2023 CPI data will keep the oil price in check this week.
FTSE 100 Index Gain Acceptance Below 7,630
When INDEXFTSE: UKX was trading at 7,900 points in April, I predicted the index might get rejected from this level. That’s exactly what happened, and the benchmark index is currently 4.4% down from that level. Another bearish sign is the price getting rejected from the 7,630 level after breaking below it.
FTSE 100 index forecast will flip very bearish if the index fails to break above 7,600 points soon. The next week’s FOMC meeting in the US will be one of the major events in this regard, together with the release of May 2023 CPI report. Technicals are pointing towards a weakness in the UK indices for the coming months.
I’ll keep sharing my updated price outlook on FTSE 100 and other UK shares in my free Telegram group, which you’re welcome to join.
